Special prosecutor Lee Kwang-bum said Wednesday his team decided against indicting the son of President Lee Myung-bak as he wrapped up a month-long investigation into a controversial land deal for Lee's now-scrapped retirement home project.
The team, however, referred tax records of the president's 34-year-old son, Lee Si-hyung, to the National Tax Service (NTS) for possible donation tax imposition, and indicted three former and incumbent officials of the Presidential Security Service (PSS) without detention on breach of trust and other charges.
The team was given 30 days to investigate allegations that the president's only son and the PSS used public funds and violated real estate laws when they jointly bought a plot of land last year for the retirement residence, which was to be built in Naegok-dong on the southern edge of Seoul. The cost was allegedly not shared evenly, with the PSS paying too high a price for the site for security facilities, at the expense of taxpayers.
"Lee Si-hyung has been cleared of suspicion of violating the real estate laws by using the wrong name in the real estate transaction," special prosecutor Lee said in a press interview.
"The team has referred investigation records to the NTS due to suspicions of his gift tax evasion in the purchase of the 1.2 billion won ($1.1 million) land," he said.
The younger Lee claimed he took out a loan of 600 million won from the Cheong Wa Dae branch of Nonghyup Bank, using a stake his mother owns in the president's private house in Nonhyeon-dong in southern Seoul as collateral. He allegedly supplemented that with another 600 million won from his uncle, Lee Sang-eun.
By law, the prosecution has no authority to indict a person of evading tax unless the NTS reports to the prosecution beforehand.
The team has brought charges against Kim In-jong, who served as chief of the PSS until October of last year, and a PSS official named Kim Tae-hwan, on breach of trust charges by letting Si-hyung buy the site at a below-market price and make a profit.
The site for security facilities was estimated to be worth 3.37 billion won in market value but the two allegedly purchased the site for 4.28 billion won, it added. The two incurred losses worth
972 million won to public funds.
Another official of the PSS, only identified by his family name of Shim, was also indicted without detention on charges of doctoring an official document, he added. Shim allegedly handed in the falsified document to the team after omitting crucial information.
Meanwhile, first lady Kim Yoon-ok, who handed in a written statement over her alleged role in the scandal, has also been cleared of all charges, it said. The team concluded that there was insufficient proof she was involved in the purchasing process.
The team failed to verify the source of the 600 million won Lee Sang-eun, chief of automotive seat maker DAS, loaned to his nephew, the team said.
Since the allegations were raised by the opposition parties, the presidential office Cheong Wa Dae has flatly rejected suspicions it was an illicit scheme to help the president's son profit. Prosecutors who initially investigated the case also cleared everyone involved in the deal.
Facing mounting public criticism, however, Lee later scrapped the project and decided to move into his existing private house in southern Seoul after he leaves office in February of next year. (Yonhap News)
The team, however, referred tax records of the president's 34-year-old son, Lee Si-hyung, to the National Tax Service (NTS) for possible donation tax imposition, and indicted three former and incumbent officials of the Presidential Security Service (PSS) without detention on breach of trust and other charges.
The team was given 30 days to investigate allegations that the president's only son and the PSS used public funds and violated real estate laws when they jointly bought a plot of land last year for the retirement residence, which was to be built in Naegok-dong on the southern edge of Seoul. The cost was allegedly not shared evenly, with the PSS paying too high a price for the site for security facilities, at the expense of taxpayers.
"Lee Si-hyung has been cleared of suspicion of violating the real estate laws by using the wrong name in the real estate transaction," special prosecutor Lee said in a press interview.
"The team has referred investigation records to the NTS due to suspicions of his gift tax evasion in the purchase of the 1.2 billion won ($1.1 million) land," he said.
The younger Lee claimed he took out a loan of 600 million won from the Cheong Wa Dae branch of Nonghyup Bank, using a stake his mother owns in the president's private house in Nonhyeon-dong in southern Seoul as collateral. He allegedly supplemented that with another 600 million won from his uncle, Lee Sang-eun.
By law, the prosecution has no authority to indict a person of evading tax unless the NTS reports to the prosecution beforehand.
The team has brought charges against Kim In-jong, who served as chief of the PSS until October of last year, and a PSS official named Kim Tae-hwan, on breach of trust charges by letting Si-hyung buy the site at a below-market price and make a profit.
The site for security facilities was estimated to be worth 3.37 billion won in market value but the two allegedly purchased the site for 4.28 billion won, it added. The two incurred losses worth
972 million won to public funds.
Another official of the PSS, only identified by his family name of Shim, was also indicted without detention on charges of doctoring an official document, he added. Shim allegedly handed in the falsified document to the team after omitting crucial information.
Meanwhile, first lady Kim Yoon-ok, who handed in a written statement over her alleged role in the scandal, has also been cleared of all charges, it said. The team concluded that there was insufficient proof she was involved in the purchasing process.
The team failed to verify the source of the 600 million won Lee Sang-eun, chief of automotive seat maker DAS, loaned to his nephew, the team said.
Since the allegations were raised by the opposition parties, the presidential office Cheong Wa Dae has flatly rejected suspicions it was an illicit scheme to help the president's son profit. Prosecutors who initially investigated the case also cleared everyone involved in the deal.
Facing mounting public criticism, however, Lee later scrapped the project and decided to move into his existing private house in southern Seoul after he leaves office in February of next year. (Yonhap News)
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